New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1887-12-06
LONDON JOINT S1OCK BANKS.
A HINT FOR AMERICAN FINANCIERs.
SUGGESTIONS MADE ny! AN ENGLISH MANA0ER-
ADVANTAGES OF THE SYSTEM.

SUGGESTIONS MADE ny! AN ENGLISH MANAGIR-
ADVANTAGES OF THE SYSTEM.
Tn IN, Editor Of me Tribune.
S,r. The Joint stock banks of London may lie
divided into two classes. those whose business u
,.trioted to that city. aud those who have branch
establishments IN the provinces or the former the
Iondon and WestminsterBankth eLVnd Joint Stock
mt and the Union Bank of ondon tie
most conspcuou. examples They are mammoth con-
csrns with ag.reGating $500 600 OF those
yh,ch orerate In the PROVINCES well, the National
Provincial Bank. and the London and County Bank
- (omttin. of course the Bank of En- land when
as s,e ,ial charter the most I'M Orant, ana their
as,ets aggregate in the ne ghborhood of $500, OOO
900.
consideration OF the latter type of bank would not
be Improbable to American bnancicrs; mole espe-
cally as this country j. tact approaching CONDITION
similar to that which first originated the system in
Great Britain The two last nYmed banks have. in
round numbers, 500 branch establishments IN
the London suburbs aud English provinces. Each
branch is under the command of manager aided by
an adequate STAFF and this manager subject To the
control of the general manager and Board of Dircc-
tors presidiny Mt the central Office in London. In
his own Office he is supreme. These branches are In
daily -pondence with their chct Office and the
Information contained in their letters and advice
sheets together with the vouminous records OF the
weeks transact and existing state OF affairs IN
detail sent up in their return sheets" each Monday
enable the management at the central ohce to keep
reliable track OF tho business of each branch.
This known sources OF possible loss or fraud are
very carefully guarded NO loans are made without
security, and secured loans must first be sub
mtt.d to the Board of Dire tors Bills Of Exchange
are passed the responsibility of tie local anger
who alone can know their value but the bills them
selves to the chief office weekly Tor SAFER
cr.toiy and for u-pecton And It Is wonderful
what a fine memory for names. and wha' kean nose
for y kite" accommodation bill, the oncIa- oil
the central discount department have. Ii has indrec
heen said the discount clerk OF the Bank oil EpS
land can scent out bad bill from a heap OF gooi
ones II Il quito cer,hin that lonS experience en-
gendsrs skill in ind sng such paper almost amount
| iug 20 an intuition. Ovcrdratts are discouraged;
they simply debts and are not readily reooterahe
like a bill OF exchange note OF hnnd. upon when
summary actor can be taken they have been found
! to be sources of frequent ire lularity.
For upward of halt century such London banks
nave been perectng and simplifying these returns Tor
the proven ion of an1 iraId and 1t J. wonderful
in the how closely they keep within ionch OF
| the facts, AMI how useful their routiLo Is to all
honest m1nasers At ire lulac intervals bat not iv-s
tn IN once six months in some cases indeed every
uulrter the banks own inspector, aith brace "i
| a.si ttnt-. descends upon the branch without ANY
| notice whatever In MS black bret haG he car
lies the branc's last returns which he Will presently
verify He presents letter from tho general man
| ag.r to tn effect tina, NJ Jones will inspect the
branch Alter Gr-t checking tho teilcrs t5h, tAe in
! spector investigates -very item al The Dank as
thorod .hly IS corps OF scavenger ants would eA-
pioro southern iarirr. At tho close oi tue third
day, prooapy, the Inspector viii intimate to the
manage that, II convenient ne would Ike to 20
through the branchs curItes-and that closes the
| inspection.
80 whisper of his own opinion VI matters escapes
the u~ pector whoss returns are gorSed with notes.
| There is poIieue.s, but 10 bDn-cOmaradeHe ~
! bet eeel b. and tho manager. Iley have verV hue
to say to eacn other. The manager ccnNult' hrs own
.nty best by not profcrrins any Information lie
! simply answers questions Inerc 49, a. rule, 10
love between the most perfect OF managers
and tho sweetest of inspectors; there probably never
was All wh) Iict to recognize the act That
the zen lest OF managers felt lonsin. to kick him
down tae bank stops On tabIlatIAg his inform ,uon
At tho chel oloo, anl alter tacns names. items" a1I
amounts through all tue ram'ic 'ti,ns OF past aud
present accounts the inspector dlgests hls own gar
Ecre harvest aud submits his report TO tho Board OI
d rectors; AMI these in their tarn stud, all tho
ioiuts AID authorize the isauo OF mIhutep to the
! branch. Minutes Oi inquiry, minutes Ol C'uEhcI.
minutes OF rcpruach minutes o. courteous command
and sometimes even minutes Of appreciation. al,
! however, dl-nined and cOurty in eXprcsslOh' Inc
Results OF the system roughly outlined here are Very
remarkable. The discipline l. OF more than mIiit"Iy
thorongnness and the outcome nstihes the oid ad"Ee
sale bind safe hnd.' .
Such an inspection IS incomparably superior to the
Intermittent scrutiny which any Government could
enforce 1t Is stem which goes on from year =
end years eud 10 the daily aud weekly returns an
we'll a. in the actual examination iself. with the
result that when the inspectors examine The books
they do not rows OF names which convey no
meaning 10 them but, on the contrary, they recog-
nize names with whose history thoy are already
intimately acquainted, and arnsi with this knowl-
edge the current account OF each client IL IN neiii-
BILE to the inspector II ret forth III the planesl
letter press The American process OF Gt verninent
ms pee:on il possibly tho est which could be deVsed
for the examination of the banks which come under
It's supervision. but In the result II ~ to voly large
extent "A useless ceremony. 1t WILL 1t is true, instruct
well-intentioned but inexperienced cashiers In the
sound principles Of banking and 1t Will probably
at least ought TO prevent sustained fraud, but
az ain It he official who fully Intends to embezze II
affords protection whatever.
Judge the two systems by their fruifsl In THIS
country bank frauds the very bHne OF commerce
aud the latest instance IL not yet two months old Ill
England among the O2ni7cd establishments there
ha. been no Improbable loss for quarter OF century
through the dealcaton OF banking officials In quot
Ing England. Scotland II not In .ldded the system
adopted there being what different. Naturally
the question will arse-but who iuspocts te inspeo
tors Tor IN other words the chief Office. No but
the system which 80 efficiently checks the branches
Ia dong the same all the time with the chief ONCE
and the directovs, through its operations become
cognizsnt OF u talse step the moment they make H.
Beyond this, too. there Ia the safeguard OF certain
fixed rules of business which long experience hat
made very efficient, and behind all there remains a
firm determination not TO beyond the lines Of strict
conservative banking In London banker il
banker act pretera nihl." he IL not n broker, he II
not o speculatOr. Ho must be like C@saI's wife
sbo 20 suspicion Ia the srctness of his business